Magnetic credit card reader devices are ubiquitous, being present at Automated Teller Machines (ATMs), at vendor checkouts, at identity card readers, etc. Their use is increasing with increasing Internet commerce, which brings with it greater need for security. Inductive heads have been used as magnetic sensors with magnetic card reader devices for decades. Inductive heads generate voltage output when moved above written transitions between magnetic bits in a magnetic track. The output voltage waveforms are fed into electronics to be digitized and encrypted before being transmitted to servers over wired or wireless networks.
Each piece of magnetic-written medium has a unique noise signature. Fingerprints of the noise in the regions between written transitions on the written medium provide an additional security feature. A noise fingerprint for each magnetic card is stored on servers when a credit card is issued to a user. At the point of sale, the information encoded in transitions (card number, user ID, etc.), as well as the noise signature is transmitted to the server where this information is stored. A high correlation between the stored noise fingerprint and received noise fingerprint from the transaction is a means of authentication and ensures extra security.
The interface between the inductive readers and signal processing electronics represents a weak point in the prior art systems. It is possible to break into card reader devices and tap into the signals at the interface, thus bypassing digitization and encryption.